Quebec’s public pension plan is investing $1-billion in a Taiwanese offshore wind project in its latest of a string of renewable-energy acquisitions.
Caisse de dépôt et placement du Québec has joined Taiwan’s Cathay Private Equity in acquiring 50 per cent of the Greater Changhua 1 Offshore Wind Farm from Orsted, the Danish developer. The 605 megawatt project, worth the equivalent of $3.4-billion, is under development off the west coast of Taiwan and is slated to be completed in 2022.
The development is designed to provide enough electricity to power 650,000 Taiwanese homes.
The Caisse has invested in other wind projects led by Orsted, although this is its first in Taiwan. The deal comes after a US$1-billion investment the pension fund made earlier this month in Invenergy Renewables LLC, the largest private developer and owner of wind and solar projects in North America. Its investments in the company have increased gradually since first striking a partnership deal in 2013.
Infrastructure holdings make up $28-billion of the $333-billion the Caisse has under management. In other renewable-energy investments, the fund has a 17.3-per-cent stake in Quebec-based wind and solar developer Boralex Inc., which made a series of acquisitions in November.
“For us and for people like us, the renewable space from an infrastructure point of view is a really nice spot to be in because it provides, for the infrastructure piece, stable returns and also the environmental aspect of it, which is increasingly important,” said Caisse spokesman Conrad Harrington.
“We’re finding opportunities and partners. Orsted could choose anybody to work with in terms of this divestment. They’re happy to partner with us here. They see us being a good partner who understands it.”
Other major institutional investors have also beefed up renewable-energy holdings recently in a global rush for assets that meet heightened environmental, social and governance criteria. In early December, for instance, Canada Pension Plan Investment Board launched a new company to boost its European investments in solar, onshore wind and battery storage, adding to a renewables unit it started in 2017.
Greater Changhua 1 is part of a two-phase, 900 megawatt development consisting of 112 turbines located 35-60 kilometres off the coast of Taiwan’s Changhua County. The long-term plan calls for another 920 megawatts to be added in two more phases beginning in 2025, assuming there is sufficient grid availability and Orsted proceeds with a final investment decision.
The Caisse and Cathay PE will acquire its stake in Greater Changhua 1 through a financing package with 15 international and Taiwanese banks and two local life-insurance companies.
The financing is supported partly by guarantees and loans from five international export credit agencies, including Export Development Canada, the companies said. The deal is still subject to Taiwanese regulatory approvals.
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Jeffrey Jones